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Gareth Hughes: Innovative Smart Grid Technologies Keynote Speech

I greet you in New Zealand’s indigenous language – te Reo Māori

Kia ora ngā mihi nui kia koutou kia ora

It’s great to be here.

I’m the Green Party spokesperson for Economic Development, ICT, Technology, Science, Research and Devlopment, Animal Welfare, Primary Industries and Biosecurity, Tourism, Commerce and Consumer Affairs and Wellington Issues and the Musterer or Whip – whewh, but my favourite portfolio is energy

As you know politicians love being photographed. As a politican I love the energy  portfolio, and all the great photo-ops you get:

Photographed looking at things

- On top of things

- Inside things

- Next to things

- Being blown by things

- Cutting things

And in our sulferous geothermal region - Smelling things

But I want to share with you my favourite NZ energy photo and the story behind it, from this place – Lake Manapouri.

No it’s don’t worry, it’s not another photo of me - but it is of another politician, a  former NZ government minister

It was taken at the near opening of the tunenls for the Manapouri dam, and they had mined for ten kilometers through the heart of a moutain, so deserved a celebration.

The minister was present and they wanted to make a bit of an impact. They still had a little bit of blasting to do, and didn’t want just a little explosion – they wanted it to be impressive.

But they probably placed a little bit too much dynamite ….because as you can see it blew everyones helmets off the moment the photo was taken. It was impressive though.

I wanted to share this photo because its 1. simply incredible, but 2 it’s a powerful symbol of change in the electricity sector.

Now in 2017, as a politican you’re more likely to be photographed in front of a computer, impessed by the code or the algorithim than dynamiting tunnels.

It’s an example of the think big – in this case 850 MW - mindset that used to dominate the energy sector.

It’s also an example of the change ofelectricity network thinking.

We used to think about energy like water pipe engineers -  now we need to think about it like software engineers.

The photo from Manapouri Dam is also a historical place for me and my party

It’s an impressive engineering feet – opened in 1971, the largest hydroelectric power station in NZ. Carved from solid rock, the machine hall is 200 metres below the level of Lake Manapouri. To enter it you need to drive 2kms underground through a winding road.

Building it they excavated nearly 1.4 million tonnes of hard rock but as there was no road access, so everything to construct it had to come by boat across the lake.

Controversy surely would follow such a gigantic engineering project.

There’s a thread that runs from the dam to where I am standing today.

The raising of the lake waters and the building of the dam engendered huge public debate.

A campaign ran for years and the petition to stop it, was the country’s largest.

From this issue came the world’s first national Green Party, ours, in 1972.

So as a member of the world’s oldest national Green party I welcome you our guests to NZ

I understand we have delegates from 27 nations represented here for the 7th Innovative Smart Grid Technologies Asia conference, for the first time organized in New Zealand.

I hope you enjoy our beautiful country.

In this keynote I’d like to speak a little but about our past, our future and the opportunity to make history by going 100% renewable.

I wanted to start with that iconic Manapouri image because for me it symbolises the big energy changes for our generation

For one – health and safety rules have changed!

Technology sure has changed – since that hydroelectric station was commissioned, the price of solar has dropped 99% and battery’s costs look like following Moore’s Law.

We know, as in the programme for the conference today, people in the energy sector are more likely talking about: Artificial intelligence, big data, robotics, machine learning, parallel computing, signal processing, embedded systems than mega engineering projects.

And now the environmental impacts of energy decisions can’t be taken for granted. We’ll never see large dams like this built in NZ again.

Fast-forward 50 years - This is such an exciting time to be involved in energy issues.

The sector is going through the biggest change in 100 years.

Polaroid, Kodak and DEC are all reminders it’s ‘adapt or die.’

When I was meeting players involved in the energy market in Silicon Valley what I hear repeatedly is that ‘utilities need to think like a Google or a Google will take over their business.’

Given the billions of dollars involved just in New Zealand, the threat of stranded distribution and transmission assets is a huge deal.

We are seeing electricity demand per capita falling, the rise of renewables and in particular prosumers and impact of new technologies like Internet of Things, Blockchain and the sharing economy.

As a politician my energy mantra has been cheaper, cleaner smarter.

I’m excited by the opportunity new ways of doing things can do to help deliver more affordable, lower carbon electricity that gives customers the power and control from a smarter grid.

You could make the argument; electricity grids are the most technologically complex collective projects we’ve ever built – more so than highway networks or even the Space Station – but for 99% of us our only involvement is paying the bills - hardly a true smart grid.

A quote that’s stayed in my mind, is from energy legend, Amory Lovins who

Here’s another politician selfy – he’s quite a character, he’s actually tickling me in this photo.

But he told me told me “we need to be “Midwives to the new rather, than morticians to the old.”

That’s my vision for NZ – embracing the new, being at the leading edge of innovation – and if we can do it right – we can profit.

We’re unlikely to ever being exporters of electricity – but there’s no limit to the export of clean energy ideas, services and intellectual property.

New Zealand has been an energy innovator before.

 - We were one of the earliest large-scale users of geothermal energy in the world, with the Waireki geothermal plant.

 - In 1965 we connected our two islands with the high voltage direct-current cable – the largest and longest cable in the world at that time.

 - Today you can’t go to an energy conference and not hear about the smart grid and demand side management, and even here we were ahead of the curve, pioneering electric water heating ripple control in the 1930s (I don’t know how they did it without Blockchain!)

Now today New Zealand has a great base to build from:

Two thirds of our homes have smart meters installed.
We have a thriving retail market with more than 30 players.
We have innovative new players like Flick offering real-time pricing
And we have a diverse generation base with an average of 84% renewable generation and nearly 4000MW of already-consented renewable projects ready and waiting to be built.

There are plenty of big challenges in energy from EVs to disruptive technologies – the biggest challenge is climate change.

The burning of coal, natural gas, and oil for electricity and heat is the largest single source of global greenhouse gas emissions.

Cleaning up our grid is one of our biggest challenges and biggest economic opportunities.

The IEA reported this year:

A bright future for renewables to 2022, solar PV entering a new era

This record performance in 2016 forms the bedrock of the IEA’s electricity forecast, which sees continued strong growth through 2022, with renewable electricity capacity forecast to expand by over 920 GW, an increase of 43%. This year’s renewable forecast is 12% higher than last year, thanks mostly to solar PV upward revisions in China and India.

Looking, longer term Bloomberg say:

Renewable energy sources are set to represent almost three quarters of the $10.2 trillion the world will invest in new power generating technology until 2040, thanks to rapidly falling costs for solar and wind power, and a growing role for batteries, including electric vehicle batteries, in balancing supply and demand.” bloomberg

For New Zealand this September we just elected a new Government – which I can safely say will be most climate-friendly government ever in our country’s history.

At the heart of our confidence and supply agreement with the Labour Party to form the Government is the ambition to work towards a goal of a Net Zero Emissions Economy by 2050.

With Green Party Co-Leader James Shaw as our new climate minister we are going to

Establish a Zero Carbon Act and an independent Climate Commission to guide government policy.
All new legislation will have to have climate impact assessment analysis         
We will establish a new cross-agency climate change board of public sector CEOs and
A comprehensive set of environmental, social and economic sustainability indicators will be developed

On the energy front we are going to request the new Climate Commission to plan the transition to 100% renewable electricity by 2035 in a normal hydrological year.

It’s an ambitious but achievable target that would position us as an energy leader.

New Zealand is blessed with a wealth of renewable energy resources – hydro, geothermal, biomass, wind with some of the highest capacity factors of anywhere, and massive marine potential but today, we generate less of our electricity from renewable sources than we did when I was born 36 years ago.

With an average of 84% renewables currently, we are so close to 100%.

But with our country’s single largest point source of emissions – Huntly Power station’s planned closure reversed and planning to burn coal into the next decade, and Nova’s new 460MW gas peaking plant gaining consent this year we are going in the wrong direction.

A total of 175 countries have primary and final renewable energy or electricity targets, or capacity targets for various renewable energy systems. 

A number of countries are now projecting dates when they plan to achieve 100% renewable electricity and my call to action is that New Zealand shouldn’t be left behind.

Earlier this year I published a technical paper I commissioned showing how it could look in practice.

The paper is available online and I’d like to thank Robert Trollop from Efficient Energy International and Norman Smith, Senior Research Fellow at the Rocky Mountain Institute for their report.

I know many of you are technical experts and would love to get down in the detail but let me start with the short version

The quick summary is that as our current fossil fuel power plants close down at the end of their economic life’s over the coming 15 years, and if we don’t allow further thermal, we have a range of generation, efficiency and demand side solutions ready to go to make sure that demand is met with with cleaner, smarter options on both sides of the meter.

Energy efficiency is an important part of the mix. Building a new geothermal power plant can cost around 7-9 cents per kWh, whereas the cost of lowering peak demand through energy efficiency can be as low as 0.6 cents per kWh.

Tackling peak demand through empowering customers with information, smarter technology and modern pricing will be key.

At the moment, NZ like many countries give utilities a license to print money to build the system to the peak – if there are cheaper options like demand side, efficiency or storage available we should be encouraging that rather than building expensive poles and wires or expensive reserve generation.

I want to see consumers informed and be empowered. At the moment many don’t even understand their power bill. Coupled with time of use pricing it could be a powerful combo.

I’ll give my own personal example – clothes dryer with fixed charges.

Then there is almost 4,000 MW of renewable energy generation consented and waiting to be built – a mix of wind, small hydro and geothermal, not to mention solar. Currently we only 60 MW of installed solar so there’s plenty of room to grow.

We’ve seen flat demand for many years so one of the big questions I always get asked, is how will we get there if we see a massive influx of electric vehicles.

The report shows even with large EV penetration and increased demand we can still get to 100% with renewables, efficiency and demand side initiatives. In fact, electric vehicles offer a transformational opportunity as a distributed network of battery storage as long as we get our pricing and regulatory settings right

Opening up the market to the many from the few will see those with battery storage able to arbitrage prices from solar stored during the day or cheap hydro at night to feed-in at the peak.

Despite their variability, with energy efficiency, renewables can offer New Zealanders a much more diversified, resilient and affordable power system.

Getting it right demands new thinking; moving beyond the way we’ve always done things and just asking what’s the marginal kWh cost of a project and look at it from the customers perspective, look at climate objectives, resilience, system benefits, and system utilisation.

We are aiming for 100% renewable in normal weather conditions because it’s affordable, achievable and eminently desirable, but most importantly because it’s the right thing to do.

I’m looking forward to seeing the new climate commission get off the ground and start to investigate getting to 100%

So in summary there’s a saying in policy circles – be like Denmark or the question – how do countries get to Denmark?

Last year Denmark set a goal of getting to 100% renewables by 2050.

My goal is to not just get to Denmark – but beat them, by 15 years.

It’s going to take people like you to get there with your skills, expertise and passion.

I hope you enjoy this conference which is happening at such a critical time in the transformation of the sector.

I also hope you have some down time to enjoy this beautiful country.

Kia ora.